Benefits of Crowdfunding

Crowdfunding is the latest in fund raising and an effective platform for thriving business to expand by raising money through donations.  The new JOBD Act will now enable businesses to make investors their shareholders and the securities exemption will now permit companies to raise up to a million dollars every year from small investors, family, friends and others who prefer an alternative to investing directly in the risk laden stock market. Investor’s interests are protected as there is a ceiling to the amount they can invest. The risk is well spread out and offers venues of investment to a larger number of people.

With no restrictions placed any small ventures like local bistros and delis who wish to expand their line of activities and are cash strapped, can raise the funds through registered agents who operate online. With the need to furnish audited financials done away with if the requirement of funds is below
$100000, the cost of funding itself has been brought down drastically. Small businesses stand to save thousands of dollars even before they get to start. With the major roadblock having been removed, it is expected that crowdfunding will benefit a wide cross-section of the business community, and even open avenues for companies that are at the startup stage.

 
Some other ideas for startup companies would be to make use of the social networking sites like Twitter, Facebook and the likes to share your project details with a whole range of people who are already active members in these sites. Your friends could chip in and help spread the message through their contacts on the very same networking sites. You can create a mailing list and even use Mailchimp which allows up to 2000 email addresses for free. Chances for good response to emails are really bright. Keep talking about your project while interacting with friends and acquaintances while at parties and any other social gatherings as it is bound to have an impact.

It is important to get to know the people better before you can start pitching directly. It is a kind of long process where you need to be in constant touch through emails and instant messages and chats and feel the pulse of the people before you can even think of asking. It is the public and general customers who form a bulk of the funders.  However, you need to set a time frame in which to implement things and have them rolling. A good estimate would be a 2 month time frame within which you should have done with the gauging and be ready to start tapping the resources. With the passage of time and nothing happening, you could lose the first people who showed some sort of interest.

Remember that you need to seek proper legal assistance and guidance as the entire concept is quite new to you. Issues like the proper agents or intermediaries to use, and whether it is necessary to go through registered and licensed brokers have to be sorted out in advance. However, it is certainly not a bad idea to go through unlicensed/unregistered agents as the cost can be kept at the minimum. The important thing though is to convince the prospective donors that they are putting money into a worthy cause.  You wouldn’t want to part with even $10 unless you are absolutely certain it is going towards a great cause. It is not just about affordability, it is about money going into the right hands.

There is a need to comply with international guidelines for charitable donations and anti-terror guidelines are met. There are several professional organizations that offer training for nonprofit organizations that wish to collect funds through crowdfunding. However, before going to such organizations, it is important that you show that some effort has been put in already from your side. This can be shown by collecting from friends and family as a trial and producing evidence of such collections having been made. After that, for any determined entrepreneur, crowdfunding should definitely be a cakewalk.

This is a guest post by Mark Bennett of workwelltogether.com, a site that offers savings and current information on comcast bundles, as well as Comcast.com services.